On the Binance.US platform, bitcoin price plunged by 87% in a minute to $8,200. At the same time, other cryptocurrency exchanges also recorded a small drop.
A Binance.US spokesperson told The Block that the price drop was tied to a software bug in one institutional client’s trading algorithm — it has since fixed the fault.
Crypto traders interviewed by the publication noted the unusual nature of the episode. They said trading firms are integrating systems to prevent such problems. They block trades under certain conditions, for example when the price used in an order diverges too much from the optimal price.
The market recovered almost immediately. At the time of writing, bitcoin is trading near $65,300 on Binance.US. Daily liquidations on the bitcoin futures market surpassed $173 million, according to Bybt.
The incident drew a hail of criticism toward the company. For example, a popular trader going by the handle Crypto Chase deemed the episode unfair, noting that some users’ buy orders at low prices were filled while others were stopped out on their stop-loss orders.
This type of shit just shouldn’t be happening. It’s not fair that some get stopped out and some stay in, some get fills and some don’t.
BTW this didn’t affect me whatsoever, just speaking aloud.
— Crypto Chase (@Crypto_Chase) October 21, 2021
Crypto traders noted that some managed to profit from the drop. One user wrote that he earned $32,000 by placing a $10,000 order “just for fun.”
I just made $32,000 on that drop. WTF? I didn’t even know. Had an order in at $10,000 just for kicks. Damn thing filled. I’m buying a motorcycle TODAY. 👍😊
— GasolineWine (@gasoline_the) October 21, 2021
Earlier today, CEO Changpeng Zhao said he expected ‘high volatility’ in the cryptocurrency market over the next couple of months.
Expect very high volatility in #crypto over the next few months.
— CZ 🔶 Binance (@cz_binance) October 21, 2021
Earlier, JPMorgan named inflation concerns the main driver of bitcoin’s price growth in the current rally.
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